Points to consider BEFORE signing the proposed amendment about the
insurance deductible and assessing the deductible to Unit Owners:
Text of the proposed amendment: (Click here to
see an image of it, in pdf form).
The Trustees may include a deductible provision, in their own discretion, and may assess
the deductible to the Unit Owner and/ or Owners who suffered any casualty loss associated with
the same. The Trustees shall have the right to assess the deductible to Unit Owners as the
Trustees may, in their sole discretion determine including, but not limited to, assessing the
deductible to Unit Owners sustaining properly damage to their unit. If a Unit Owner sustains
property damage in amounts less than the Condominium Association's deductible, the Unit
Owner shall be solely responsible for the cost to repair the damage, and the Unit Owner
should notify his or her insurance agent. The Trust will not be responsible for property
damage to a unit in an amount less than the deductible, and no Unit Owner shall file a claim
with the Master Insurance agent or carrier.
You may believe, from the mailings from the Management
Company, that the Board is only seeking the power to raise the deductible
from $1,000 to $5,000. The actual text of the amendment seems to give
the Board to raise the deductible to whatever they please. (Some Board
members and Jill DeSantis have from time talked about a deductible of $15,000).
Would you refinance your house mortgage with an unspecified interest rate
that could be changed, at the sole discretion of the bank, to whatever the
bank wanted each year, with no limit on the change to the interest rate?
The Trustees are asking for the power to assess, in their sole discretion,
the deductible to the Unit Owner who suffered any casualty loss associated
with the same. Does this mean that if your roof blew off and caused your
unit to experience $20,000 damage and the master deductible was $15,000,
you could be assessed individually $15,000? (The Trustees could, using
their sole discretion, make this $15,000 a common expense if their own roof or
a roof of a "friend" of theirs blew off).
may believe, from the mailings from the Management Company, that by having
a higher coverage A dwelling limit or a HO-0435 loss assessment coverage
limit increased from $1,000 that
your loss described in (2) above could be covered by your individual homeowners
policy. However, if you read your individual homeowners policy, you
will find in endorsement HO 04 35 04 91 (for Loss Assessment Coverage) the
following "SPECIAL LIMIT: We will not pay more than $1,000 of your
assessment that results from a deductible in the policy of insurance purchased
by a corporation or association of property owners." This means,
that for a loss as described in (2), your homeowners policy would pay $1,000
at most, and $14,000 would be uncovered. (A higher loss assessment
coverage of, say, $10,000 would only help you if the condominium incurred
a loss above its limit of coverage. For example, if there was a loss
of $2,500,000 due to many roofs blowing off in a hurricane and the master policy had a limit of $1,000,000
per occurrence, a special assessment of 1,500,000/268= about $7463 per unit
would be made (assuming the Trustees did not use their sole discretion granted to them by this amendment to assess
the deductible to those Owners affected by the hurricane individually). Then,
your individual policy would pay $7463 - your individual deductible (say, $500)=$6963).
Note: If you do not find the Special Limit described here in your policy,
please follow this link to sign the Guestbook
to let us know.
The Amendment says, "No Unit Owner shall file a claim with
the Master Insurance agent or carrier."
If the insurance carrier for your individual homeowner policy was the
same as the carrier for the master policy (which is recommended by some agents,
because it reduces disputes over who is responsible for paying a claim),
would this prohibit you from filing a claim with your individual carrier?
(It would be fine if the wording of the amendment prohibited a Unit
Owner from filing a claim by themself against the master insurance policy.
However, the amendment prohibits more than this).
Property Manager says the Master policy underwriter "is threatening to cancel
our insurance unless we increase out (sic) deductible within 30 days." This
does not mean you need to sign the proposed amendment before reading it carefully.
Our present Condominium documents only require a deductible of no more
than $1,000 if such is available. When it was not available in 1997,
the Board had a Master policy with a deductible of $2,500 (the closest available
deductible to $1,000). Hence, not signing the proposed amendment does
not mean we will have no master policy. It will, within a year, require
the Board to put the master insurance policy out to bid to see if a $1,000
deductible is available, instead of renewing the master policy with our present
underwriter for a deductible five times higher than now with no significant
decrease in the premium and with no other bids being solicited. In any
case, please keep in mind that the "insurance amendment" has only one line
out of ten that increases the insurance deductible. The other 90% of
the "insurance amendment" involves other changes (described here in points
2-4) that were not disclosed to Unit Owners before now.